SINGAPORE: On Dec 1, the Economist Intelligence Unit (EIU) ranked Singapore as the most expensive city, with New York sharing the number one spot. Singapore had been in second place last year, in a tie with Paris.
It is the eighth time in a decade that the Little Red Dot has taken pole position and the first time for the Big Apple to do so, bumping Tel Aviv, 2021’s number one, to third place.
Finance website dollarsandsense.sg recently listed four reasons why Singapore yet again took the number one spot on the list, which are: high inflation, a strong Singapore dollar, pandemic restrictions and the war in Ukraine, and expensive discretionary goods.
In 2021, prices rose by 3.5 per cent in many big cities around the globe, but this year, that figure has more than doubled to 8.1 per cent.
“This is the fastest rate for at least 20 years. Petrol prices have seen the most rapid increases, but utility and food prices have also increased sharply, according to EIU,” wrote dollarsandsense.
In Singapore, the average overall inflation rate is about 6 per cent, said the Monetary Authority of Singapore and Ministry of Trade and Industry recently, with food and accommodation cited as contributors to the rise in prices.
A Dec 2 article in Financial Review said that the cost of a certificate for driving a car in Singapore for ten years had risen from S$55,000 last year to over S$90,000 this year due to fewer and fewer certificates being deregistered.
The same piece says that rents for HDB flats have also gone up, and private housing prices are up by over 30 per cent year-on-year, according to data from real estate firms.
However, the good news is that prices may ease in the coming year, with improvement in supply chain disruption and bottlenecks.
Consumer price inflation around the globe is expected to fall from an average of 9.4 per cent in 2022 to 6.5 per cent next year, EIU said.
“Unless the war in Ukraine escalates, EIU predicts that commodity prices for energy, food and for supplies such as metals are likely to fall sharply in 2023 compared with 2022 levels, albeit higher than previous levels,” adds dollarsandsense.
On Dec 7, the government also commented on the EIU ranking, saying that it “may not reflect the cost of living for Singaporeans.”
“The WCOL survey looks at the prices of a common set of products and services in the various cities to allow for city-to-city comparisons. As such, its consumption basket may not reflect what Singaporeans usually consume and is therefore not a good gauge of cost of living for Singaporean households.
For instance, its consumption basket includes products such as Burberry-type raincoats and foreign daily newspapers – these are typically not purchased by Singaporean households. A more representative indicator of cost of living in Singapore is the Consumer Price Index (CPI), which measures the average change in the prices of a basket of goods and services commonly purchased by Singaporean households,” it said in a statement. /TISG